Render unto Caesar… Most of the speculative reasoning comes from SImon Wardley's great presentations. I just assembled what seems to be the relevant core motivation and some real-world use cases.

1. Cloud demystified
Information Session for a Belgian
financial institution
Gabriele Bozzi @gabrielebozzi
25/10/2011
© Gabriele Bozzi 1

2. What is Cloud
Computing?
Cloud Computing
is an operating
model!
© Geek and Poke
© Gabriele Bozzi 2

3. What makes the Cloud
a utility service?
You heard it “ad nauseam”
• The modern Utility Computing model:
 Scalability (theoretically: infinite)
 Elasticity (don’t waste resources)
 Accessibility (everybody, on demand, no lock-in)
 API (no API, no party!)
 Unlimited storage (better if file-oriented)
 Automation (if runs more than once: automate!)
John Mc Carthy predicted in 1964 that computing: « will
eventually become an utility service in the future ». It took
more than 40 years to make it happen.
© Gabriele Bozzi 3

4. Why “Cloud”?
FOOTBALL COMPUTING
ON DEMAND
SOCCER CLOUD
The author takes full responsibility of his views
© Gabriele Bozzi 4

5. Surprise: the Cloud is
an enabler!
• The Cloud is an operating model (again)
• It allows IT to react and act faster
• It doesn’t make save you money, rather spend
it better*
• It doesn’t require disruptive investments in
terms of assets
*This will be explained later (Jevons Paradox)
© Gabriele Bozzi 5

6. Resistance is futile
Strategic importance of information
technology in business has diminished as IT
has become more commonplace,
standardized and cheaper*
*See Nicholas G. Carr references
© Gabriele Bozzi 6

7. IT is a commodity
This is the zone
Ubiquity Utility Services where ROI is
maximised
Commodity
Demand
The curve’s slope
represents the
Product investment impact
Custom built
Innovation Improvement
Certainty
Computing, as a product, has become so widespread and improved so
much that is now transitioning to the utility service model
Thanks to Simon Wardley for mapping the “S” curve to Cloud Computing
© Gabriele Bozzi 7

8. The marketer’s party:
Private Clouds
You have heard so much bad marketing from
vendors about Private Cloud systems and Private
Cloud storage that aren't really cloud, now you
have bad connotations about the whole thing.
Why limit it to “Private”? Why not call it (and use it
as) Enterprise Cloud?
Apparently “Private” is a misnomer: in the initial Cloud-hype cycle, many vendors were
worried of the “control” issue of Cloud, therefore “Private” sounded more sellable
© Gabriele Bozzi 8

9. The posture against
Enterprise Cloud
• The promise is to increase level of efficiency by building
your own abstraction layers
• Cloud administrators run an entire data-center, instead
of being responsible for just one technology
• It is the evolutionary mid-term technology to bridge
Enterprise IT to full commoditisation
• Be it IaaS, PaaS, SaaS: the objective is to raise
competitiveness by adopting standard practices
© Gabriele Bozzi 9

10. Risks
• Of course the Cloud has risks:
Transitional risks: governance issues, security
of supply, general security
Outsourcing risks: lock-in, price competition,
loss of strategic control
Disruption risks: non-commodity products
falling victim of the change
The truism of the day is:”Don’t put all your eggs in one basket”
© Gabriele Bozzi 10

11. So: Do I need Cloud?
Market
Ubiquity
Competitive gap
You
The Red Queen
Hypothesis*: "It takes
all the running you can
do, to keep in the same
place."
Certainty
No, but consider those activities that are becoming less strategic; by
ignoring commoditisation you are likely to create a competitive
disadvantage for yourself as anyone else is racing for ubiquitous benefits
*Originally proposed by Leigh Van Valen (1973)
© Gabriele Bozzi 11

12. The Jevons Paradox
“Technological progress that
increases the efficiency with
which a resource is used, tends
to increase the rate of
consumption of that resource”*
In Cloud terms:
Expect no significant reduction in
spending by adopting Cloud,
because it opens more William Stanley Jevons
opportunities to generate
competitive IT consumption
*The Coal Question, 1865
© Gabriele Bozzi 12

13. Are there Quick-wins to
achieve with Enterprise
Cloud?
• Yes! Here are some areas to watch out:
Extreme load variation
Storage, information management
Big Data
Commoditise procurement
Non strategic activities
© Gabriele Bozzi 13

14. Extreme load variation
An unfair comparison
• SEPA DD platform on • SEPA DD platform on
Open Systems mainframe
• Elastically allocated VMs, • Monolithic code on
EJB 3 mainframe
• In-memory caching • File transfers
• 24m bulk transactions per • 5m bulk transactions per
run (< 8hrs) day
• 3.800 Man-days to • 6.100 Man-days to
production production
• Up to 50% of processing • Mips cost affects TCO
comes from unused CPU (typically 2000m)
© Gabriele Bozzi 14

15. Storage, information
management
• Press editors and news providers deploy a unified online store for
their publications
• Proposed architecture: Object storage supports ingestion and
content storage/distribution on the same support (55TB of
publications and semantic indexes)
• Keep back-office processes in-house
3 yrs estimate
145%
140% 140%
135%
130%
125% 126%
121% 122% Monthly TCO Cloud (%)
120%
115% 116% Monthly TCO in-house (%)
110%
112%
N.B. TCO takes in account:
105% Depreciation of IT and turn-over of
100% equipment.
250k 500k 1m 2m 4m 8m Depreciation of Cloud prices on
3yrs span
In-house storage and content distribution has higher TCO than Cloud storage
© Gabriele Bozzi 15

16. BigData goes public
Clouds (1)
Up to 3000
CPUs
• Bank Of America uses Map-Reduce
(Hadoop) to cope with cross product
risk management: from home loans to
online banking
Baseline 300 CPUs
• Bankinter in Spain uses Amazon cloud
computing as an integral part of their
credit-risk simulations. Reduces
process times from 23hrs to 20min
• Capture and deliver near-real time
Wed Thu Fri Mon Tue
results!
• Use innovative data imaging (R, Typical Duty Cycle of CPU utilization for
Risk Management Systems a financial
Tableau) institution runs on Amazon’s public Cloud
Courtesy of Amazon AWS® Europe
© Gabriele Bozzi 16

17. Assisted Desktop
Virtualization
• DaaS: Desktop as a Service, no CapEx (e.g.
Citrix Farm)
• Good for provisional procurement, home
working, outsourced workforce
• Shares economies of scale of the Cloud with the
customer
• Decrease 3 to 5 times the yearly TCO of a
Virtual Desktop (e.g. 360 US$ vs 1.200 US$)*
*Prices are exclusive of application procurement (just Windows)
© Gabriele Bozzi 17

18. Thank you!
See appendixes for more material
© Gabriele Bozzi 18

19. Appendix A: vendors,
technologies
• Microsoft Azure (PaaS) is coming to a datacenter near you (yours)
• Amazon AWS, the public Cloud is becoming more enterprise
• OpenStack, the linux of Open Source
• Piston Cloud Computing , Enterprise-grade, high security OpenStack implementation
• Citrix CloudStack , agnostic cloud infrastructure platform
• RightScale, manages multiple Clouds unlocking your infrastructure
• Dell Boomi, IT management on the Cloud
• Rackspace, the “other” public Cloud, acquired CloudKick, great Cloud monitoring tool
• Puppet, Chef, are two well established automation tools
• Hadoop, on the way to become a standard for highly scalable distributed batch jobs
• VMWare Octopus, the Cloud file exchange for the Enterprise
• VBlock, Cisco, Vmware EMC to bridge Cloud with existing operational models
• Nirvanix, simply the best object storage on the market: now partnering with IBM
• Fujitsu Global Cloud Platform, offers a Cloud infrastructure in Belgium
• Thales, making the Cloud more secure by dispersing information
• CA, acquired 3Tera and delivers Cloud IT management software
• IBM SmartCloud, the integrated application platform
• Nolio, is application release automation for development and dev-Ops
• Desktone, desktop PCs as a service!
© Gabriele Bozzi 19

20. Appendix B: references
• The Enterprise Cloud Leadership Council
http://www.tmforum.org/EnterpriseCloudLeadership/8009/home.html
• Van Valen “The Red Queen Hypothesis”
http://en.wikipedia.org/wiki/The_Red_Queen_hypothesis
• Simon Wardley (Lef.csc.com) “Situation Normal, everything must change”
http://www.youtube.com/watch?v=5Oyf4vvJyy4
• William Stanley Jevons: “The Coal Question”
http://en.wikipedia.org/wiki/The_Coal_Question
• Nicholas G. Carr: Does IT Matter? Information Technology and the Corrosion of
Competitive Advantage (Harvard Business School Press)
© Gabriele Bozzi 20

21. Appendix C: Useful links
• IBM Implements secure Government Cloud: http://bit.ly/aRjEWp
• Thales and Layer 7 to make Cloud more secure: http://bit.ly/pDp7Ac
• 90 Cloud companies to watch in 2011: http://bit.ly/fvGbci
• Cloud Computing use cases newsgroup: http://bit.ly/p9yGga
• CloudScaling builds Clouds, Google-class Clouds: http://cloudscaling.com/
• TibCo Silver Cloud platform: http://bit.ly/qkEfCi
• Enstratus, Cloud governance utilities and consulting: http://bit.ly/8geaNf
• Cloud functional and performance testing from Soasta: http://www.soasta.com/
• The Belgian Cloud marketplace, IaaS, DaaS: http://bit.ly/q196mo
© Gabriele Bozzi 21

22. Appendix D: On the
inevitability of the
Cloud
This cartoon appeared on Geek & Poke
in March 2011
It was meant to be humoristic
Amazon presented on October 2011
“Silk”; a browser that runs on their Cloud
and is accessible by a rendering engine
on Amazon Kindle Fire
Resistance is futile…
© Gabriele Bozzi 22

23. Appendix E: Enterprise
Clouds
Market Ubiquity
PaaS integration levels
MS • Strong
Hyper-V • Competitive
Azure
Demand
OpenStack • Evolving
Citrix
Gigaspaces
HP, Dell, Vblock Likely sell-out
Fujitsu, IBM Cloud
Foundry HP, Dell,
CA Fujitsu
Applogi
c
Oracle
Exalogic
Nimbul
a
Strategic control
Agnosticiy
The selection is not exhaustive of the current market’s status
© Gabriele Bozzi 23